That is a fundamental distinction, yes. But the notion that exporting brings wealth to a country is… kinda not really the case anymore.
If that wealth is ending up in very few people’s hands, and if said people are wealthy enough that they keep their money offshore (which is the case a lot of the time), what is the big difference in making something you can export?
Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?
They went to China because it was cheaper. They went there in detriment of their countrymen that went without jobs, in detriment of the environment (what with all the shipping boom that followed), even in detriment of their own countries, since this would stifle development and industrialization. And they KNEW that technology transfer would follow, because China had made it clear.
No one forced them to do it. They did it knowingly in the name of short and medium-term profit. I’m not even judging if that is bad (I do THINK it’s bad overall, but I’m not arguing it here). I’m just pointing out what happened.
So now the West must not be surprised. And they aren’t! They just need to craft narratives that will paint them in good light.
Perhaps it would be more accurate to say that US policymakers deregulated capital flows with China in the hopes that it would lead to political liberalization. Businesses always just follow the money, but for a long time American policy makers had made it difficult to invest in China, from regulatory uncertainty to restrictions on dual use technology exports to high tariffs.
It really was an intentional decision, largely on the part of the Clinton administration, to make investing in the country easier and improve the economic well being of Chinese citizens in the hopes it would inevitably lead to democratization. Clearly, those hopes were just that though
> Perhaps it would be more accurate to say that US policymakers deregulated capital flows with China in the hopes that it would lead to political liberalization.
I'd say "in the hopes it would satisfy the political-donor class." The desired liberalization of the PRC was... not necessarily a falsehood, but not the main reason either.
> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?
Yes I think. At least a lot of Western policymakers did buy a "change through trade/investment" story, and it wasn't pulled from nowhere because it had worked in the past.
In postwar Japan and later South Korea, integration into the West's economic system coincided with eventual democratization, closer alignment of values, and alliance.
It was reasonable to think the same thing would work in China, but that doesn't seem to be the case.
Also the US intentionally set China up for investment by doing things like bringing them into the WTO. All that investment wouldn't have happened without some level of government support.
I'd totally believe they would have lobbied for it, but even absent lobbying I think policymakers would look at historical trends and conclude that deeper western economic times would ultimately benefit the West strategically as well. Lobbying could have further incentivized and accelerated it though.
True, but both SK and Taiwan had always wanted to be more aligned with the West as they needed to be under the US defense umbrella. The liberalization could only come after gaining stability.
On the other hand, China has always sought to regain what it considers to be its rightful place as a first world power and to recover from its “century of humiliation.”
I think the CCP has been pretty consistent in this stance. Policy makers in the West that didn’t notice were blinded by corporate wishful thinking.
You’re confusing the faction leading the country with the people themselves.
South Korea and Taiwan as countries don’t have an inherent will to align with the West. The countries are made up people with different beliefs, some are more aligned to democracy (what you call the West) and some aren’t. Even today Taiwan has a political party that is pro-CCP.
The logic is not that the CCP will suddenly want to align with the West, it’s that the people will become more pro-Democratic as they become more developed (both economically and politically).
No, I’m intentionally speaking of the leadership. Yes there are dissidents in China (and Russia and NK…) but the governments have been able to make their work seem futile.
There are also some Chinese who are happy to live in a police state. There are also some US citizens who would like more of a police state, provided the police are on their side of the culture wars.
The fantasy is that capitalism automatically breeds liberal democracy. Sometimes it does, but don’t forget it can work the other way too. It was the excesses of capitalism in the gilded age that led to the rise socialist revolutions in the first place. Sometimes might say today’s billionaire capitalists are becoming like the robber barrons of the gilded age.
In our current system, which is, without a doubt, a corpocracy, it's easy to forget that before the 1970s, corporations didn't have that much power at all, and they were regularly overruled by other organizations - labor unions, government social welfare programs, religious institutions, grassroots movements, etc. Allowing corporations to maintain access to the US market while outsourcing jobs to countries with slave labor is the exploit/loophole that allowed corporations to amass wealth and MADE corporations as powerful as they are today.
This does sound radical (and it is), but the lack of capital controls is essentially what's created the ability for corporations to engage in massive, massive labour arbitrage to the detriment of many citizens in the West (I personally, and my family have benefited from this, but that doesn't make it right).
> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?
Not the businesses. Governments and their advisors that encouraged it thought that. Francis Fukuyama's "end of history" bullshit was widely believed, and even now retains some influence.
Did big businesses in the West really think “investing” in China would lead to “freedom” and such?
You’re right in your assumption that profit-seeking was the major part of it - like, it wouldn’t have happened otherwise.
But the idea that the West trading and interacting with China would mean the populous (and perhaps government) would come to understand the benefits of a free society, and so China would trend towards a Western political system - probably gradually rather than violently - was a mainstream view from the 80s to the early 2010s.
> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?
It worked in south korea and taiwan which were severe military dictatorships before (maybe you could throw japan im there too?) so the history of capitalism liberalizing countries isn't all failures
There was definitely a broad (not universal) triumphalist belief on the part of both elites and the broader population in the West after the fall of the Berlin Wall and disintegration in the 90s that capitalism and democracy were intertwined and the triumph of both was inevitable.
This widespread belief doesn't have to be true to help contribute to explaining why decisions were made to allow broad economic integration with and technology transfer to China, in a ways that never really happened with the Soviet Union, and only happened in very limited ways with China prior to the collapse of the Soviet bloc.
People who burnt witches generally believed that witches existed. That belief doesn't have to be true to be useful in contributing to explain the behavior.
I mean, yes, you are right, I lived through all that, and I remember it well.
But to me, even at the time, this was at best, magical-thinking bullshit. But what does a teenager know..? I just write the things my teachers tell me to and get graded on them.
The massive backslide in Russia throughout the 90s and 00s towards autocracy at the same time as it was turning into a capitalist country... Wasn't exactly a state secret.
Warsaw pact states tying themselves to a democratic union in an effort to get as far as they could from Russia was, I think, the larger reason most of them didn't go down the same road.
>Did big businesses in the West really think “investing” in China would lead to “freedom” and such?
BDS is a thing. It toppled South Africa's regime and makes Israelis gnash their teeth. Part of the "sell" for investing in China, and buying Chinese products, was that we were bringing them Capitalism, which would bring them wealth and freedom. The alternative is that you're fueling a Communist regime that is going to become your rival and adversary. Maybe I'm mixing up which was explicit and which was implicit, but there's no way Americans would have been on board with everything if the latter was seen as a real possibility. So either big business knew and suppressed it, or they genuinely themselves believed that they could do business in China and not support strengthening the CCP. (And, before Xi rose to power, that was not an completely unreasonable thought.)
Actually, it's both. I wanted to study media theory, and it was interesting that his work both appeared in compilers and philosophy, so I thought, “Let’s buy some books and dig into them.” The content was stupid, but I didn't need to throw the books away. After writing that comment here, I actually went and sent all of them to paper recycling...
No one ever forced any company to work with China. They all went to China over decades because it was cheaper and made more profits, knowing full well there’d be technological transfer since it was always China’s goal and even explicit in contracts and agreements.
Being surprised now that profits became technology transfer and China is now a real competitor is useless. They knew it, just didn’t think the Chinese could be real players in tech, or didn’t care because short-term profit was more attractive.
So it was profits then, and if you’re asking “what sort of VC deals were they shackled by”, it’s profits now. So the point of the article still stands, Wall Street screwed them over.
Oh, for sure, I'm just highlighting that it's not like they're playing on a level field. The US marketplace is self defeating with asymmetric regulations, unenforceable patent and IP knowledge transfer with countries like China that just ignore it, effectively, with zero accountability. It's not all external though, they could have had a much better leadership team and used all sorts of things in their favor early on to really capture the market, despite anything and everything else that happened. Apathy, VC-style race to the bottom dynamics, probably went public too soon, and didn't build momentum and a culture of high quality R&D (a whole lot of drama every time they considered using private data and monetizing on their intimate in-home access.)
They also missed out on AI getting good - by the time transformers came around and people realized they'd be really useful for stuff like Roombas, it was too late, and with shareholders just looking to cash out and minimize their losses toward the end, there's not a lot that could have been done to save it. Even if they'd gone to Amazon, there wasn't a lot left that had value beyond the branding, imo.
I think American companies would be more successful and higher quality if the regulation and IP policy we embraced were reciprocal. As it stands, unless you're Apple or Samsung or a giant, you have to win the CCP PR lottery for any sort of accountability with Chinese companies. Most of the time they're going to ignore you, because there's no downside. It's only in those cases where there are political ramifications, individuals being embarassed, or they feel a need to trot out a "look how conscientious and good faith we are in the international markets!" piece useful for other wheeling and dealing.
> I think American companies would be more successful and higher quality if the regulation and IP policy we embraced were reciprocal
The problem is that US patent law stopped technological advancement. Why innovate if you can buy some patents, hire talented lawyers, and have them do their magic? It's strange that Chinese products changed from "cheap knock-offs" to "global leadership in innovation" and nobody stopped and asked themselves what exactly made US companies just give up on innovation.
> No one ever forced any company to work with China.
"Forced" is a strong word here, but company's do need to compete or die. If your competitors are manufacturing in China and selling widgets at a price less than what an American factory can produce them for, what choices do they realistically have?
To expect merchants to get together and act according to some greater good is a pipe dream. Government should have stepped in and prevented the offshoring of American industry through policy
Yes, such are capitalism’s incentives, I’m afraid.
But this could have been managed. FDR managed it, other governments somewhat managed it with policy in times of war, like WW2.
The US had the technology edge for DECADES. More industrialization would lead to more inovation and more jobs. They could invest in factories and the like, and even marketing, since “american made” has always been a fine talking point for companies. But it was cheaper in the short term to ship it to China and just not care about the future.
The governments didn’t care, the companies (owners, shareholders) certainly didn’t care, and as a result, decades later, they’re stuck with fascism. Which I don’t think they care about either.
If that wealth is ending up in very few people’s hands, and if said people are wealthy enough that they keep their money offshore (which is the case a lot of the time), what is the big difference in making something you can export?